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Political Competition, Rent Seeking and the Choice of Environmental Policy Instruments

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  • R. Damania

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    Abstract

    This paper investigates the impact of political lobbying on the choice of environmental policy instruments. It is argued that the prevalence of pollution emission standards over more efficient policy instruments may result from rent seeking behaviour. The model further predicts that when an emission standard is used to control pollution, rival political parties have an incentive to set the same standard. There is therefore a convergence of policies. Moreover, it is shown that emission taxes are more likely to be supported and proposed by political parties which represent environmental interest groups. This feature appears to accord with the observed support for environmental taxes by ‘Green’ parties in Europe, Australia, New Zealand and elsewhere. Copyright Kluwer Academic Publishers 1999

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    File URL: http://hdl.handle.net/10.1023/A:1008299920714
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    Bibliographic Info

    Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

    Volume (Year): 13 (1999)
    Issue (Month): 4 (June)
    Pages: 415-433

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    Handle: RePEc:kap:enreec:v:13:y:1999:i:4:p:415-433

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    Web page: http://www.springerlink.com/link.asp?id=100263

    Related research

    Keywords: environmental policy; political competition; pollution taxes; rent seeking;

    References

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    1. Hillman, Arye L & Ursprung, Heinrich W, 1988. "Domestic Politics, Foreign Interests, and International Trade Policy," American Economic Review, American Economic Association, vol. 78(4), pages 719-45, September.
    2. Conrad Klaus, 1993. "Taxes and Subsidies for Pollution-Intensive Industries as Trade Policy," Journal of Environmental Economics and Management, Elsevier, vol. 25(2), pages 121-135, September.
    3. Buchanan, James M & Tullock, Gordon, 1975. "Polluters' Profits and Political Response: Direct Controls Versus Taxes," American Economic Review, American Economic Association, vol. 65(1), pages 139-47, March.
    4. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
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    Cited by:
    1. Bouwe Dijkstra, 2004. "Political Competition, Rent Seeking and the Choice of Environmental Policy Instruments: Comment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 29(1), pages 39-56, September.
    2. Georges A. Tanguay & Paul Lanoie & Jérôme Moreau, 2001. "Environmental Policy, Public Interest and Political Market," Cahiers de recherche 01-01, HEC Montréal, Institut d'économie appliquée.
    3. Drosdowski, Thomas, 2006. "On the Link Between Democracy and Environment," Hannover Economic Papers (HEP) dp-355, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    4. Polk, Andreas & Schmutzler, Armin, 2005. "Lobbying against environmental regulation vs. lobbying for loopholes," European Journal of Political Economy, Elsevier, vol. 21(4), pages 915-931, December.
    5. Louis Jaeck & Gilbert Bougi, 2010. "Dynamics of Environmental Regulation and Voters’ Biased Beliefs: A Political Economy Approach," Atlantic Economic Journal, International Atlantic Economic Society, vol. 38(4), pages 399-409, December.
    6. Coria, Jessica & Hennlock, Magnus, 2010. "Taxes, Permits and Costly Policy Response to Technological Change," Working Papers in Economics 442, University of Gothenburg, Department of Economics.
    7. Tim Friehe, 2013. "The Role of Investment in Environmental Lobbying Contests," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 56(3), pages 337-352, November.
    8. Jie He & Paul MAKDISSI & Quentin WODON, 2007. "Corruption, Inequality, and Environmental Regulation," Cahiers de recherche 07-13, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
    9. Goodhue, Rachael E. & Gruere, Guillaume P. & Klonsky, Karen, 2002. "Public Preferences, Pressure Groups, And Public Policy Regarding Multifunctionality In Agriculture: Compatibility And Conflict," 2002 Annual meeting, July 28-31, Long Beach, CA 19595, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Beard, Rodney, 2007. "Rent seeking, interest groups and environmental lobbying: Cane Farmers versus Great Barrier Reef Protectionists," MPRA Paper 5351, University Library of Munich, Germany.
    11. Alberto F. Alesina & Francesco Passarelli, 2010. "Regulation Versus Taxation," NBER Working Papers 16413, National Bureau of Economic Research, Inc.
    12. Paul Lanoie & Jérôme Moreau & Georges A. Tanguay, 2001. "Environmental Policy, Public Interest and Political Market," CIRANO Working Papers 2001s-37, CIRANO.

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